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Real Estate Notes Georgia Exam Prep: Finance and Closing Part 3
This deck covers key concepts related to real estate finance and closing procedures in Georgia, including types of mortgages, taxes, deeds, and foreclosure processes.
Federal agencies created this to assist first-time homebuyers facing rising house prices and rising interest rates.
Graduated Payment Mortgage (GPM) Loans
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Key Terms
Term
Definition
Federal agencies created this to assist first-time homebuyers facing rising house prices and rising interest rates.
Graduated Payment Mortgage (GPM) Loans
A mortgage in which personal property is included with the real property in the sale. Commonly used in commercial real estate where business assets are included as collateral.
Package mortgage
The agreement is between the seller and the buyer; the original borrower remains responsible for the debt, and the buyer makes payments to the seller.
When property is sold subject to the existing loan
It involves the seller’s existing mortgage and a buyer’s new mortgage. The new mortgage wraps around the existing mortgage, and the seller continues to make payments on the existing mortgage. The buyer makes payments to the seller that cover payments for both the existing and new mortgage loans.
Wrap-around mortgage
It Passed in 2002 and substantially amended in 2003, it addresses predatory lending practices. It targets excessive fees, expands processes for high-cost loans, and imposes stiff penalties for anyone connected to a loan determined to be in violation of the act’s provisions.
The Georgia Fair Lending Act (GAFLA)
Who is responsible for the transfer tax and how to calculate it?
The seller. Sales Price/1000*1
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| Term | Definition |
|---|---|
Federal agencies created this to assist first-time homebuyers facing rising house prices and rising interest rates. | Graduated Payment Mortgage (GPM) Loans |
A mortgage in which personal property is included with the real property in the sale. Commonly used in commercial real estate where business assets are included as collateral. | Package mortgage |
The agreement is between the seller and the buyer; the original borrower remains responsible for the debt, and the buyer makes payments to the seller. | When property is sold subject to the existing loan |
It involves the seller’s existing mortgage and a buyer’s new mortgage. The new mortgage wraps around the existing mortgage, and the seller continues to make payments on the existing mortgage. The buyer makes payments to the seller that cover payments for both the existing and new mortgage loans. | Wrap-around mortgage |
It Passed in 2002 and substantially amended in 2003, it addresses predatory lending practices. It targets excessive fees, expands processes for high-cost loans, and imposes stiff penalties for anyone connected to a loan determined to be in violation of the act’s provisions. | The Georgia Fair Lending Act (GAFLA) |
Who is responsible for the transfer tax and how to calculate it? | The seller. Sales Price/1000*1 |
Who is responsible for the intangible tax and how to calculate it? | The buyer. Amount borrowed $1.5 per $500 up to $25,000 |
A written deed in Georgia must contain the following elements and conventions: | Grantor Name: The Seller; Grantee name: The buyer; legal property description; Consideration; Granting Clause; Any restrictions or exceptions to the deed; Grantor Signature; Delivery and Acceptance |
What is the trustee’s role when a deed of trust is used to secure property for a loan? | To hold legal title to the property on behalf of the beneficiary until the loan is repaid |
Which real estate finance instrument in Georgia may include the pledging of collateral and the release of that collateral in the same document? | Security deed |
The clause is also known as a due-on-sale clause. | The alienation clause allows the lender to make the loan due if the borrower sells or otherwise transfers the property. |
When a borrower fails to cure any default within 120 days of the lender’s original notification, the lender may begin the foreclosure process. In Georgia, borrowers may redeem the property __. | Up to five days before the scheduled foreclosure sale |
The document that describes the loan amount and the terms for repaying and is attached to a security instrument is called the . | Promissory note |
Which clause in the deed of trust and Georgia’s security deed is the equivalent of the defeasance clause in the mortgage? | The reconveyance clause and the defeasance clause stipulate that the borrower receive full title to the property when the debt has been repaid. |
Andrea’s lender has notified her of its intent to foreclose. Her loan is secured with a security deed. What rights does she have to redeem her property? | The security deed gives Andrea the right to cure the default and reinstate the loan, but no rights of redemption after the sale. |
Jacob lost his job in an economic slump and is behind on his mortgage. Georgia is a non-judicial foreclosure state. Which section of his security deed gives his lender to right to sell the property if he defaults? | The Transfer of Rights in Property section gives the lender power of sale, meaning the lender can sell the property without judicial proceedings if the borrower defaults. |
Of the following, what is the main distinguishing feature between a mortgage, a deed of trust, and Georgia’s security deed? | The mortgage and the deed of trust serve the same purpose, but states may establish one or another as the preferred instrument due to the foreclosure process associated with each. |